Security Deposit Law Doesn't Apply to Commercial Tenants

When a commercial tenant's lease ended, the owner refused to return the $3,000 security deposit to the tenant. The tenant sued the owner to get back the deposit. A lower court ruled that the owner had wrongfully withheld the security deposit. The court said that under a Missouri security deposit law, the owner must pay the tenant $6,000—twice the amount of the security deposit. The owner appealed.

A Missouri appeals court ruled that the Missouri security deposit law applied only to residential tenants. Thus, the owner was required to pay the tenant only $3,000. Reading the law in isolation, the law suggested that any tenant can recover twice the amount of its security deposit from an owner that wrongfully withholds a deposit, noted the court. However, the law was part of a chapter addressing landlord-tenant actions.

To determine whether the state's legislature meant to apply the law to all tenants, the court read the law “in harmony” with the entire chapter. The court noticed that the chapter used the term “dwelling unit,” instead of commercial terms such as “leased property” or “premises.” Thus, the legislature must have meant the security deposit law to apply only to tenants that leased dwelling units, reasoned the court.

The court added that the legislature passes laws to protect residential tenants because tenants are not on an equal footing with owners. However, the legislature believes that commercial tenants are on an equal footing with owners, so they can adequately protect themselves in their leases.

• PDQ Tower Services, Inc. v. Adams: No. WD66231, 2007 Mo. App. LEXIS 131 (Mo. Ct. App. 1/23/07).